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Tony Moldo, brings years of expertise in the sourcing process, with a primary focus within the eSourcing practice. With the multitude of different bid strategies that he’s worked with, TCO Sourcing & Consulting helps organizations determine the optimum strategy for your business and sourcing decisions. He utilizes a unique proprietary system to execute various bids and drive the process for you.
TCO Sourcing & Consulting has been developed with one goal in mind: to make the procurement process more efficient. They aim to save dollars for organizations during a time when companies are looking for more ways to cut expenses and save money.
MO: What influenced your decision to create TCO Sourcing & Consulting? How has your experience and background contributed to the development and success of the company so far?
Tony: While I was at Target, I realized that many of the organizations that we worked with did not utilize the eSourcing process, a practice that they were very familiar with and not adopting. During my time there, we helped an organization with their sourcing process and saved them a significant amount of money. After that, I realized the opportunity to help organizations outside of the Fortune 500 adopt the same process that the Fortune 500 companies used to procure their goods, products and services.
My background has helped tremendously with helping companies realize their best total cost of ownership. Because I believe it’s critical to build a relationship with an organization, I am very selective about when it is appropriate to execute an eSourcing event. The one thing I always tell organizations is this process is not about the lowest cost, but instead the best total cost of ownership. eSourcing will also help the organization realize a savings in time, with the buyer being able to focus more on increasing revenue while TCO Sourcing & Consulting can help focus on decreasing costs.
MO: How can you save companies time and money by consulting with them on different ways of reviewing their sourcing process?
Tony: When we step into an organization, we want to learn about their current process and understand if they are experiencing any challenges. We actively listen and ask clarifying questions, so we can be strategic about our approach. Once we have done that and have possibly determined if there is an opportunity for our services, we help them with the sourcing process and via the eSourcing process, eliminate time that they normally have to dedicated to making the clarification calls and negotiating.
Because we review the best total cost of ownership, we help organizations realize that it’s not the lowest cost, and it not always the incumbent who are the best choices, but instead review the bid with an objective viewpoint. Objectivity can very often be confused with subjectivity. If it doesn’t make sense to change suppliers due to a difference in price, quality or service, we are sure to place realize that prior to the bid.
MO: What are the most common procurement mistakes you see people making and how can they avoid them?
Tony: One of the most common mistakes people make is they are too comfortable with their incumbent. Because they are comfortable with that supplier, they do not request pricing from other organizations for a number of years. Typically when we see this, we know there is an opportunity for savings.
Our advice is simple: It is great if you are comfortable with your current supplier. But always know the premium you may be paying for that comfort.
Just because an organization executes an RFP does not mean they need to change suppliers, however they should put a cost associated with the cost of that relationship. In other words, if they are paying 30% more with their current supplier, they will have to ask if that is an acceptable cost of business.
Another common mistake an organization will make is when they will invite multiple suppliers to bid, but will have no intention to award to a new bidder. We call this bid shopping and it will generally make the suppliers disappointed with the process and hurt any future relationship. If they are looking to get pricing to keep their incumbent honest, they should be upfront about their intentions and utilize that time to build a new relationship. They need to respect the time of the suppliers.
MO: Can you tell us about the system and what advantages it provides your clients?
Tony: The advantages of using the system that we have contracted with are the following:
• It helps streamline the sourcing process and can save the buyer a significant amount of time (estimates have been between 35-50% of their time, depending upon the complexity of the bid)
• It enables the buyer to respond to questions in a centralized system. The suppliers can log into the system and submit questions and the buyer can respond directly to the supplier or can elect to respond to all of the suppliers.
• The system can hold all of the documents needed in the bid – scope of work, diagrams, pictures, terms and conditions, and many other documents. This helps eliminate the multiple emails that a buyer may send out.
• It also creates a competitive atmosphere for the suppliers. At no time do the suppliers see what other organizations are participating, but dependent on the bid type, they may or may not see the others pricings. It helps eliminate a significant portion of the buyer’s time, emotion and still helps maintain that buyer/supplier relationship.
MO: What’s been the best business advice you’ve been given during your career?
Tony: The best advice I was given many years ago, and wish I had heard it sooner is, “There is a reason why we have two ears and one mouth. Listen to what people have to say, because you may learn something.”
MO: What are your plans for expanding outside the Minneapolis market?
Tony: We are currently strategizing on expanding outside the Minneapolis market. We want to be sure that we are strategic with our moves and are able to provide our clients with a superior experience and terrific service. We will be able to accomplish this by looking in the future at providing more services and expanding our network of experts.
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